“Predatory” Credit Card Companies: Can You Identify Them?

Image via Wikipedia

What is a “predatory financial institution?” They are all around us today and it is sometimes surprising who they are. Usually they are banks and credit card companies. It often gets dangerous when a bank uses credit cards to “get your money.”

I recently had a personal encounter with a predatory bank. It was my own fault (it usually is) but sometimes it gets hard to keep your guard up all the time and sometimes your personal circumstances play a major role in your “mistake.”

I of course cannot name the bank but I assure you that the circumstances are true.

Almost everyday I get an offer in the mail to get a credit card. The reason for that is that we have had some major medical problems in our family so we have in the past had some poor credit. Even though we have made gains they still have our name.

Of course the obvious predatory offers are easy to spot. You know the ones; you can get $300.00 of guaranteed credit but there is about $240.00 of various first-year fees so that your net credit would be about $60.00 with a new debt of $240.00.

Here is where you are more likely to get burned and, note my circumstances:

A few months ago I got an offer in the mail for a guaranteed card with a credit limit of $750.00. As long as I met certain minimum requirements which I did I could have the credit. I got the card.

I didn’t use the card the first month but when I got the bill I had an annual fee of $65.00 due as well as a fine of $10.00 for not using the card. Failure to use the card over a certain period of time would result in cancellation.

One of the reasons I wanted to have some extra credit on my person was that I had to take a trip to the Mayo Clinic with my wife.

I made sure and used the card the next month. This time with the bill I was advised that the interest rate was going up on “my class of card.” It is important to understand that banks can do that. They can make “poor customers” pay more than customers with great credit as long as they do it “to” everyone.

The next month I got an offer to get “insurance” in the event I couldn’t make my card payments due to the inability to work. The problem is that the likelihood is slim and the price of the benefit is high.

Finally, I was sent an offer (and this one kept coming over and over) to participate in a “buying club.” Of course there was a fee and also it focused my purchasing. I was being used because of my “business relationship” with the bank.

We went to Mayo’s.

I am paid partially by a direct deposit to my bank account. It comes the same day every month. At Mayo’s I wanted to make an online payment to my account because the fine for being late was incredibly high. I set up the payment for a certain date to coincide with that date.

The payment was sent a day early. My bank charged me an NSF fee of $30.00 and sent the payment back to the credit card bank. They promptly charged me an NSF fee, a late fee and since the charges put me over-limit since I had the card holding the hotel room, an over-limit fee all of which came to about $125.00

When I explained the situation to everyone my home bank refunded my $30.00. The rest was left alone, no change. Even though they said they would make “things right;” they never did.

Then the phone calls started. Every morning starting at 8:00 am they would call.

Finally I just paid them off.

It was an experience that I could have done without. It is an experience you can do without as well.

My suggestion is to do business with major credit card companies or local banks where you have accounts.

Companies who have a charge for everything and fees upfront are bad news.

Image via Wikipedia